PolitiFact: Assumptions wrong on carbon proposal

WASHINGTON, DC - MAY 22: House Speaker Rep. John Boehner (R-OH) holds his weekly press conference at the U.S. Capitol on May 22, 2014 in Washington, DC. During his statements, Boehner said that he is getting closer to calling on Veteran Affairs Secretary Eric Shinseki to resign. (Photo by T.J. Kirkpatrick/Getty Images) 493618129

New carbon regulations will increase electric bills by "$17 billion every year" and "potentially put an average of 224,000 more people out of work every year."

House Speaker John Boehner, June 2 on his website

The ruling

The estimates actually come from a U.S. Chamber of Commerce study that was released in late May. We took a look at it last month, and noted it made several assumptions about the Obama administration's proposal. We warned that the findings of the study would be relatively unusable if those predictions did not come to light.

And that's what happened.

Last week, the Environmental Protection Agency announced a goal of reducing carbon emissions 30 percent (based on 2005 levels) by 2030. This is achieved in part by creating carbon caps for each state and providing options for them to reach their targets, including regional "cap and trade" networks, investing in renewable energy and smart grid technology, and eventually phasing out many existing coal plants.

But the chamber study that Boehner and other Republicans cite assumed that the Obama administration would want to decrease carbon emissions by 42 percent — not 30 percent — before 2030. When it comes to the pace for reducing CO2 levels, this is a significant difference.

This is a point even the chamber made to PolitiFact now that Obama's regulations have been released.

"We were never saying those were the numbers for any scenario other than the ones that we put forward," said Matt Letourneau, spokesman for the Institute for 21st Century Energy at the U.S. Chamber of Commerce. "Now that we have a different benchmark, we're taking a look at the rule and the analysis and the model and we'll see what we can do (to update the study)."

Why don't the numbers work? By assuming a much more difficult goal, the chamber also predicted that by 2022, the EPA (under a different president) will have to change course to meet the 42 percent threshold. The only means to accomplish this, the chamber concluded, was to force new natural gas plants to use carbon capture and storage technology. In September, the EPA said new natural gas plants would not need to include carbon capture in their facilities.

A large chunk of the chamber's estimated costs of the carbon rules comes from the assumption that new natural gas plants will require carbon capture technology, which they say is 50 percent more expensive to build and also more expensive to operate. Therefore, their assumption that power companies face $478 billion in compliance costs — $339 billion from construction — is likely overblown.

Letourneau and Boehner's office both noted media reports that said the 30 percent threshold could be increased before the final regulations are approved. (Of course, it could also be lowered, too.) There will be a 120-day public comment period before the EPA releases its final draft.

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